• Microsoft beat analyst expectations in its earnings report Tuesday after market close, reporting (non-GAAP) profits of 69¢ a share on revenues of $22.6 billion. Analysts had expected a gloomier picture, with earnings per share dropping to 58¢ on revenues of $22.1 billion. The company’s stock briefly rose 4% after market close Tuesday, then began to normalize.
• One of the major storylines in Microsoft’s earnings report today is the progress of the company’s transition from a traditional business computing company to a cloud services company. Revenue from Microsoft’s productivity and business processes business grew 5% to $7 billion compared to last year’s June quarter. Its cloud business revenue grew 7% to $6.7 billion in the quarter. Within that, the Azure cloud computing business grew 102% year-over-year with computer usage more than doubling year-over-year.
As Microsoft CEO Satya Nadella said in a statement:
This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations. The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.
• XboxLive monthly active users grew 33% year-over-year to 49 million.
• The company’s mobile phone business declined 71% versus the same quarter last year.